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Employees

Good employees can be your greatest asset, so recruiting and retaining the right people is very important to your business success.

Whether you are new to business or have a number of staff working for you, there are important things to consider when employing and managing your staff.

Recruitment

As your business grows you may need to employ additional staff with new or different skills. Hiring a new employee for your business is a big decision. There are a number of things to consider such as, what rights will your staff have to things like minimum rates of pay, pay slips or leave.

It is a good idea to invest time into recruitment planning. Good recruitment and induction practices will help your new employee start off on the right foot and contribute to the productivity of your business sooner.

Undertaking the recruitment process may also be a good opportunity to identify current skills gaps, diversify your workplace and hire people facing barriers to employment. There are a number of funding and incentive schemes available for businesses that support people with a disability, Indigenous Australians, the long-term unemployed and the mature-aged.

The Fair Work Ombudsman website offers a guide to hiring new employees and an online learning course on hiring employees to help you build a picture of the employee you want to hire.

Employer obligations

Management success often relies on treating your staff well. Abiding by your legal obligations as an employer is the first place to start. Legal obligations to employees and other workers come from a variety of sources including federal, state and territory laws, industrial awards and agreements, tribunal decisions or contracts of employment (written or verbal).

 Find out about legal obligations in your state or territory.

Pay and awards

Employees have to be paid the right pay rate for all hours they work, including time spent in training, team meetings and doing a trial shift.

The minimum wages and conditions an employee is entitled to are set out in awards (also known as modern awards). Awards don’t apply when a business has an enterprise agreement or other registered agreement and the employee is covered by it. Modern Awards cover things like pay, hours of work, rosters, breaks, allowances, penalty rates and overtime.

To work out the correct award and classification, the Fair Work Ombudsman’s Pay and Conditions Tool steps you through simple questions about your industry sector and the role and responsibilities of the employee. Based on your answers, the tool will identify the award, classification, pay, entitlements and allowances that apply.

If you are still unsure, you can contact the Fair Work Ombudsman’s Small Business Helpline on 13 13 94 (option 3).

Taxation

Employers need to be registered for pay as you go (PAYG) withholding in order to pay employees. Employers must take out the right amount of tax from their employees’ pay and send it to the Australian Taxation Office (ATO). This process makes it easier for employees to pay their tax, because it is collected throughout the year.

If you need help to work out how much tax you need to withhold from payments, use the tax withheld calculator on the ATO website.

The amount of tax employers should take from an employee’s pay depends on how much they earn and the information on their tax file number declaration form. Employer withholding obligations depend on whether the worker is an employee or contractor.

To help employees do their tax, employers must provide an ‘annual payment summary’ showing how much they earned and how much tax was taken out of their pay over the previous financial year.

Employers will also need to give the ATO an annual PAYG report and tell them how much tax was taken out of each employee’s pay.

Superannuation

Running a business and employing people involves superannuation obligations.

All employees are covered by a superannuation guarantee which means that employers need to take certain steps to meet their requirements. If you're a sole trader, or in a partnership, you're not obliged to pay super.

You can use the Australian Taxation Office (ATO) Superannuation guarantee contributions calculator to work out how much super you must contribute for your eligible workers.

Visit the ATO website to find out about your obligations.

SuperStream

SuperStream is a standard that requires employers to provide payments and the associated data to superannuation funds in a specific electronic format.

From 1 July 2015, employers with 19 or fewer employees started using the SuperStream standard for contributions. Larger employers should already be using SuperStream.

Flexible working arrangements

Certain employees have the right to request flexible working arrangements including changes to hours, patterns and locations of work. Employers can only refuse these requests on reasonable business grounds.

Employees who have worked with the same employer for at least 12 months can request flexible working arrangements if they:

  • are the parent, or have responsibility for the care, of a child who is school aged or younger
  • are a carer (under the Carer Recognition Act 2010)
  • have a disability
  • are 55 or older
  • are experiencing family or domestic violence, or
  • provide care or support to a member of their household or immediate family who requires care and support because of family or domestic violence.

Casual employees can make a request if they have been working for the same employer regularly and systematically for at least 12 months, and it is expected that this will continue.

Visit the Fair Work Ombudsman website for more information about flexible working arrangements.

Employee entitlements

Wages and employment conditions are often one of the first things a potential employee will consider about a job. They are also an effective way to reward employees according to their skills and experience.

Entitlements for work conditions in many jobs are governed by the national workplace relations system, which includes modern awards and the National Employment Standards (NES). The NES contains 10 minimum entitlements for employees, although not all of these apply to casual workers.

You may also have the option of setting out wages and conditions of employment in an enterprise agreement or written contract of employment if your employees are not covered by an award.

Find out more about ensuring you are paying employees the right amount. For more information about minimum rates of pay and other conditions under this system, visit the pay page on the Fair Work Ombudsman website.

Online training

The Fair Work Ombudsman offers free and interactive online learning courses for employers, through their Online Learning Centre.

Through the Online Learning Centre, employers can learn new skills and strategies to help with:

  • having difficult conversations in the workplace
  • hiring employees
  • best prepare for starting a new job
  • promoting good employee performance and address under performance.

Bullying, harassment and discrimination

As an employer, you have a responsibility to ensure that your employees work in a workplace free from bullying, harassment and discrimination. Employer responsibilities are set out in a range of state, territory and federal laws which help protect people from unlawful behaviour.

The following resources are available to help employers develop effective policies and best practice guidelines for preventing bullying, harassment and discrimintation in the workplace:

Mentally healthy workplaces

Prevention and effective management of mental health conditions in the workplace reduces the social and financial impacts.

Creating a mentally healthy workplace is important to reduce staff absenteeism, increase productivity and to get the best out of yourself and your staff.

If you need help to create a mentally healthy workplace, try the following resources:  

Supporting working parents

Supporting pregnant employees and working parents makes good business sense. It helps you retain valued employees, as well as build a positive work culture that promotes loyalty and productivity.

The Australian Human Rights Commission has developed the Supporting Working Parents Employer Toolkit and Successful Strategies to Support Working Parents: A Guide for Employers to provide clear information on employer responsibilities, as well as guidance from businesses who have implemented strategies and practices to support pregnant employees and working parents.

It sets out how different laws interact, and highlights not only what employers need to be thinking of to make sure they are compliant, but also what they could do to be working at best practice.

A toolkit is also available for employees which outlines their rights in relation to pregnancy, parental leave and return to work.

Employing legal workers

Employers could face infringements or civil penalties if they employ, refer, or contract illegal workers.

An illegal worker is a non-citizen who is working without a valid visa or working in breach of visa conditions.

Employers can check visa details using a free online service called Visa Entitlement Verification Online (VEVO).

Visit the Department of Immigration and Border Protection website to find out more about employing legal workers.

Complaints and dispute resolution

Problems arise every day between businesses and their employees. Most problems between employers and employees relate to issues such as wages, awards and agreements, harassment or discrimination.

How do I deal with an employee dispute?

While there are many ways to resolve conflicts, most problems can be resolved through simple discussion and common sense between the parties involved. In most instances, you should at first attempt to resolve a dispute through direct discussion and negotiation. This will save you and your business from the possibility of a costly legal battle.

The Fair Work Ombudsman's website has an online learning centre with free interactive courses to help employers and employees talk to each other about difficult topics. The courses help you get ready for the conversation and practise your skills.

Establishing a process to resolve complaints without the need for court involvement is not only a cheap and effective way to resolve disputes, it is an important part of your legal responsibilities as an employer.

Making a complaint

If you are an employer or independent contractor and you are having a dispute about pay or conditions, use the Dispute Support tool to find the most appropriate service to assist you to resolve your dispute.

Ending employment

At some stage, an employee will leave their position within a business, whether it’s through resignation, redundancy or dismissal. While the loss of skills and experience can weaken a business, it can provide an opportunity to refresh the culture and add different skills to the business.

There are different rights and obligations that come with ending employment that an employer must meet. Find out more about termination of employment on the Fair Work Ombudsman’s website.

There may also be tax implications when employment is terminated. For example, you may be required to make an employment termination payment, which is a lump sum payment you make when an employee stops working for you. Visit the Australian Taxation Office website to find out about your obligations.